The two main routes of oil supply, the Strait of Hormuz and Bab al-Mandeb, are going through a crisis. aside for the last 100 days strait of hormuz But tensions remain between Iran and the US, while Houthi rebels have threatened to close Bab al-Mandeb at any time. Due to the crisis on both these routes, there is a huge shortage of oil and gas in many countries of Asia and Europe.
Initially, Saudi tried to take full advantage of this crisis, but now the demand for Saudi crude oil has decreased, due to which Saudi Arabia has had to cut the prices of its crude oil. According to a report by Wall Street Journal, Saudi Arabia has reduced the price of its crude oil by $6 per barrel. Saudi had to take this decision due to low demand.
Why did the oil price have to be cut?
1. Due to closure of Hormuz, Saudi Arabia was selling oil through the Red Sea. In March 2026, Saudi sold 49.74 lakh barrels of crude oil per day, but now the situation is not good. Many countries in Asia and Europe have stopped taking oil from Saudi. For example, China is importing oil through Iran’s old tankers. Whereas countries like India are buying oil from UAE.
2. An increase in oil supply of UAE is being seen. According to Bloomberg, during a tender in June 2026, UAE sold 14 million barrels of oil to Asian countries. Oil supply to countries like Iraq, Qatar and Bahrain has also started.
3. Diplomacy is an important issue. Saudi is currently with countries like Pakistan and Türkiye. Whereas in South Asia, China and India are the main buyers. Both mainly buy oil from countries like Iran and UAE. Due to this also Saudi oil sales have decreased.
Big question- what will happen next?
Everyone’s eyes are on the Strait of Hormuz. Five Gulf countries spoke to US President Donald Trump on phone on Monday (June 8). These countries say that peace is the only solution in the Gulf. These countries appealed to immediately stop Israel’s attack.
According to the head of the US negotiating team and Vice President JD Vance, Iran has sent a serious proposal. We are in constant touch. Things can be resolved soon.
However, the times to come are going to be difficult for Saudi. Because, on one hand, UAE has exited OPEC. After the agreement between America and Iran, Tehran may get permission to sell oil. This will cause direct loss to Saudi.
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